1. Law of Contract Discharge of Contract

2. Discharge of contracts A contract is said to be discharged when the rights and obligations agreed in it come to an end. There are four ways by which this happens. 1.Performance 2.Agreement 3.Breach 4.Frustration

3. Discharge by performance Performance by the parties of their obligations will of course, discharge the contract. The problem arises when one of the parties claim that he has performed the obligation while the other disagrees. To fulfill the obligation, the performance must be an Entire performance. This requirement may result in injustice in some cases.

4. Entire performance Cutter v Powell (1795) Facts : A sailor had contracted to serve on a ship travelling from Jamaica to Liverpool. He was to be paid 30 guineas for the voyage, payable when the ship arrived in Liverpool, but he died during the journey. His widow sued for wages up to her husband’s death. Held : Unfortunately the court held that the widow could Not claim as the performance had to be entire,..ie. It had to be completed, and in this case it was not.

5. Entire performance In some cases this may allow parties who wish to escape from what has become an unprofitable Contract to do so by taking advantage of the, entire performance requirement. Re Moore & Co Ltd and Landauer (1921) Facts : On delivery the purchasers claimed that the Canned fruits were supposed to be packed in cases of 30 tins. Some of the cases had 24 tins. The total amount of tins delivered was correct though. Held : The courts held that the entire performance did not correspond, with the description as regards the packing and thus the courts felt that the performance was not discharged.

6. Exception to entire performance Exception to the rule that performance must be an entire performance. The following are mitigating factors to the entire performance rule. 1)Substantial performance 2)Severable contracts 3)Voluntary acceptance of partial performance 4)Prevention of performance by the other party.

7. Substantial performance The doctrine of substantial performance, allows a party Who has performed with minor defects to claim the Price of the work done, less the money required to Put the defect right. Hoenig v Isaacs (1952) Facts : an interior decorator contracted to refurbish a flat for £750. The defendants had paid £400 in advance, but then refused to pay the remaining £350 claiming that the design and workmanship were defective. Held : The courts agreed that the workmanship was defective, but it held that there was substantial performance and thus The defendants were required to pay up, less £56 for correcting the defect. See Bolton v Mahadeva (1972) : where substantial performance was not satisfied.

8. Severable contracts A contract is one that is severable where, payment becomes due at various stages of performance, instead of at the end of an entire performance or substantial performance. Most contracts of employment severable in nature. In a severable contract, the price for each stage can be claimed when the stage is completed, although there is a breach or incompletion in the later stages.

9. Voluntary acceptance of partial performance In some cases, one party may agree to accept and pay for part performance from the other. Where such an Agreement can be “inferred” from the circumstances, The claimant is said to sue on a,“Quantum meruit”. This would be allowed only if the party making the promise had a choice. Sumpter v Hedges (1898) Facts : A builder agreed to construct two houses and a stable on the defendant’s land, for £565. However he abandoned the Project after completing £333 worth of work, so the defendant had To complete the building himself, and did so using the materials Left behind by the builder. The builder claimed for quantum meruit, but the courts refused. Held : The defendant was not choosing to accept the part performance,..he had no real alternative. see also Cutter v Powell : sailor who died during journey

10. Prevention of performance by other party Where one party performs part of the agreed obligation, and is then Prevented from completing the rest by some fault of the other Party, a quantum meruit, can be used to claim the cost of work done. (he can only sue for breach of contract ) Planche v Colburn (1831) Facts : Where the plaintiff was contracted to write a book on Costume and ancient armour, for a fee of £100. After he had begun Writing, the defendant’s decided to cease publishing the series of which the book formed part of. Held : The author was able to recover £50 on a quantum meruit.

11. Prevention of performance by other party Where one party cannot perform without the other’s cooperation, rejection of an offer to perform (tender of performance), will Release the party tendering performance from any further Obligation. Startup v Macdonald (1843) Facts : The plaintiffs agreed to sell ten tons of oil to the defendants, to be delivered, by the end of March. On the last day of March the plaintiffs arrived with the oil at 8.30 pm. But the defendants Refused to accept the oil saying it was too late in the day. Held : The plaintiffs sued for damage and were successful. The court held that they had done all they could, even though It was at an “unreasonable hour”. See S29 (5) of Sale of Goods Act 1979 which will have different Impact on the case now, as regards reasonable hour.

12. Breach of terms concerning time What happens if a party performs the contract, late, but as regards all other terms of contract performs as agreed.? If time is “of essence”, then delay would cause a recission of the contract. Three ways where contract is classified as one where time is of essence, are as follows : 1) Parties may state this in their contract 2) It may be inferred from the nature of the contract, or circumstances surrounding it. 3) A contract where time is not originally of essence may become so if a party delays and then the other party gives “notice of a time limit on performance.”

13. Breach of terms concerning time United Scientific Holdings Ltd v Burnely Borough Council (1978) Facts : The defendants were landlords of premises leased by the plaintiff tenants, under a 99 year lease. For the first ten years the rent was to be fixed, with an option to review the rent every ten years. (The condition was that the review must be done by the landlord before the end of the 10 year period). The landlord reviewed the rent only after 2 months after the 1 st 10 year period. The plaintiffs argued that the time was of the essence. Held : The HL rejected the argument and held that there was a presumption that time was not of the essence in this case.

14. Vicarious performance of contract Is a contract discharged if the contractual obligation of one of the parties are, at that party's request, performed by someone else? The general rule is that the other party cannot object to that unless it prejudices their interests. Davies v collins (1945) Facts : the defendant accepted a uniform for cleaning, under a contract stating that. “..every care is exercised in cleaning...”, The defendant sent the uniform to a sub-contractor for cleaning. Held : The contract was not “discharged” by the defendant and there was a breach, although damage was caused vicariously.

15. Breach of terms concerning time Where vicarious performance is permitted, liability for performance nevertheless remains with the original contracting party. Stewart v Reavell's Garage (1952) Facts : the plaintiff took a 1929 Bentley to the defendants' garage, to have the brakes re-lined. The defendants suggested that the work be done by a sub-contractor and the plaintiff agreed. Unfortunately the work was done badly, and the brakes failed. Held : The court held that the defendant's were vicariously liable, even though “performance” was vicariously completed when the plaintiff agreed to allow the vicarious performance.